European Goldfields: Centerra joins suitors' queue

Canadian mining company Centerra Gold has emerged as one of several parties
interested in a £1.4bn takeover of European Goldfields.

Centerra is understood to have expressed an interest in European Goldfields in recent weeks.

Last week, European Goldfields shares leapt almost 18pc after the company revealed it had received a number of £1bn-plus takeover approaches.

The confirmation of the interest followed the publication of a report that said Canadian mining company Eldorado Gold Corp, which is listed on the Toronto Stock Exchange, had already expressed a desire to acquire European Goldfields.

However, the group warned that "no formal offers have been received and there can be no assurances that any transaction will result from any of these approaches".

On Friday, the company's shares rose 26.5 to 801.5p, giving it a market capitalisation of £1.4bn.

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The approaches come after the Qataris agreed in October to lend European Goldfields $750m (£479m) to fund the development of its two flagship gold mines in Northern Greece. As part of the deal, Qatar Holding could become one of the group's largest shareholders.

Investors in European Goldfields, which is listed on Aim and in Toronto, are due to vote to approve the Qatari deal on December 22 in Canada. However, there is speculation that Eldorado's approach may scupper the Qatari deal.

Although people close to the company played this down, they admitted the vote may be adjourned.

The takeover tussle for European Goldfields is part of a scramble for resources as the price of gold trades above $1,700 per ounce. As a result, the eastern Mediterranean has come back on the gold industry's map and small mining companies are stepping up exploration in Turkey and Egypt, which has restarted gold mining through London-listed Centamin Egypt.